TM R

MONEY
 PRACTICAL GUIDE FOR

INTEGRATED
Financial Planning
Published By
Investors Financial Education Academy
Parkview, Basement, 85/17, G.N.Chetty Road,
T. Nagar , Chennai - 600017.

For further information, please contact :

Investors Financial Education Academy
email: bulletin@ifea.in
Ph: 044 2814 3044 / 2814 0815
website: www.ifea.in

TM R
 Investors Financial Education Academy

PREFACE

Both IFE Academy ( 2011) and IFE Foundation( 2020) are charitable non profit organisations
incorporated under section 8 of the Companies Act with necessary approval under sections
12A and 80G of the Income-tax Act and registered under the Corporate Social Responsibility
Rules.
As a non- profit charitable organisation, WE use the information WE collect to provide you
with a better experience and fulfill our mission of providing a free, world class education for
anyone, anywhere. We established ourselves as a non-profit organisation with the following
objectives so that a ‘not for-profit’ motive will not interfere with our mission of providing a
trusted educational source.
Ÿ To promote financial education and digital management of financial records
Ÿ To create awareness about the importance and advantages of digital management
Ÿ To create awareness and empowerment through financial education campaigns
Ÿ To initiate and carry out sustainable activities of charitable nature on education related
areas.
Ÿ To facilitate the availability of Massive Open Online Courses (MOOC) courses and STEM
(science, technology, engineering and mathematics) education to children
Ÿ To provide assistance through scholarships, grants and other assistance

Ÿ To establish digital libraries and to provide instant access to educational content .

Investors Financial Education Academy

CIN Number:U93000TN2011INPL079317
12A approval: AACCI5911RE20214 dated 28/5/2021
80G approval: AACCI5911RF20206 dated 09/07/2021
CSR register No: 00006780
 I F E Foundation
Integrated Fintech Education Foundation

In order to carry out the above objectives, WE have jointly prepared a project report under
the Corporate Social Responsibility Rules with the following deliverables in a nutshell.
1. Scholarship to students who does specialized courses online and improves their
knowledge on any subject.
2. Financial literacy courses to strengthen the personal financial skills.
3. Creation of a qualified people’s database which could be used by Corporates for
recruitment.
4. Providing Personalised financial reports to interested investors and help them with a
financial plan.
5. Facilitating e filing of income tax returns for investors who are not tech savvy through
Integrated.
6. Facilitating “practical digital record management (DRM) education” for investors,
business persons and companies by way of special arrangement with Integrated.
6. Periodical distribution of “financial education” related e- books at an average rate of
Rs.10 per book. Corporates can select the title of books as well as the "list of persons"
at their option for distribution of books.

Team Integrated

I F E Foundation
Integrated Fintech Education Foundation
CIN Number: U80902TN2020NPL134120
12A approval: AAFCI5672JE20214 dated 28/5/2021
80G approval: AAFCI5672JF20214 dated 28/5/2021
CSR Register No: 00010116
(1) WE are implementing a joint project on “Integrated Financial Education for any one ,
anywhere, at own place” as a part of our corporate social responsibility ( section 135
of the Companies Act,2013)
(2) There is no direct link or obligation between the services offered by “INTEGRATED
Group” of companies and the voluntary contribution made by tax paying individuals/
companies to IFE Academy or IFE Foundation.
(3) Even though we are eligible to accept public contributions, WE will accept
contributions from tax paying public/ companies only.
(4) The details of project report and activities undertaken will be displayed in the
websites of both the companies as well as that of contributing companies. All
contributions made by companies/ persons are eligible for 80G tax benefits other
than those opting for 115BAC ( new tax) rates.
(5) Persons/ companies sending ‘voluntary contributions’ should quote their PAN
number in their message. Contributions can be made by any “digital payment” option
like UPI, Net Banking, cards, Amazon pay, PhonePe, G Pay, Bill Desk)

For Individuals For Companies & Others

IFEA EDUCATION CORPUS FUND
Name of the Bank / Branch
City Union Bank / Mahalaskhmi Street/ T.Nagar
IFSC code:CIUB0000001
A/c No.:510909010170415
IFEF EDUCATION CORPUS FUND
Name of the Bank / Branch
City Union Bank / Habibullah Road/ T.Nagar
IFSC code:CIUB0000652
A/c No.: 510909010170228

(6) Temporary acknowledgements will be issued immediately and 80G certificates will
be sent at the end of the financial year under 17A of Incometax Rules,1962.
(7) We do not ask for details of your bank account/ PIN/Password etc. as we do not do any
banking transactions with the public except acceptance of voluntary contribution
from tax payers.
 CONTENTS
PART 1

10 Things to do to be a Moneysensible Family ........................ 1 - 11

Simple rules of Integrated Financial Planning ........................ 12
Planning for your Family’s Financial Future ........................ 13 - 29
Money Multiplier Tables ........................ 30 - 33

PART 2

Wait Till 31st July for filing your Income tax return
(Financial year 2020-21) ............................. 35
Important changes ............................. 36
Old Regime and New Regime ............................. 37
Tax Rate Reckoner on different types of Income ............................ 38
Comparison between Existing & 115BAC rates ............................ 39
Tax return filing and future planning ............................ 40 - 43
Presumptive Tax Planning for Professionals/ Business persons ............................ 44 - 48
Tax Planning as an investment and protection mechanism ............................ 50 - 54
Equity investment is a part of Smart Planning ........................... 56 - 61
Details of tax rates applicable and effective net return ........................... 62 - 64
Standard Tax Planner table ........................... 65 - 67
Standard Term Insurance Need .......................... 68
Financial Prudence Planning Savings A/c .......................... 72
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5
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 Tax cum Investment Planning
An important component
for your overall Financial Plan.
Careful planning throughout the year can assist you in reducing the taxes you pay – as well as
help you achieve your financial goals.
Tax planning should not be done in isolation, but instead should be driven by your overall
financial goals and integrated with your total financial plan. By developing and
implementing appropriate strategies to lessen or shift current and future tax liabilities, you
can improve your prospects of meeting long-term and short-term objectives.
Financial prudence involves proper understanding and compliance of existing regulations
followed by proper planning and execution in three areas
(a) Tax cum Investment Planning
(b) Career Planning.
(c) Succession Planning.

34
 WAIT till 15th August
for filing your
Income tax return
(Financial year 2020-21)

WHY?
Due date for filing the TDS returns / sending Ÿ There is no compulsion to maintain
form 16 have been extended upto 15th July/ detailed books of account for audit if your
31st July respectively. total income is less than ₹50 lacs per
Your 26AS statement with enhanced details annum.
will therefore be ready for use from 1st Ÿ If you are familiar with computer systems,
August,2021 only. Don’t worry as sufficient you can even download “tax return
time is available and the due date for filing preparation” utilities in OS-Windows 7 or
the return is 30th September,2021 only. Last later versions (Processor- Intel Pentium 4
date for linkage of Aadhaar with PAN” is also processor or later, 1.5 GB of RAM or more,
extended upto 30th September,2021. HDD-500MB or more of free space),
Ÿ Financial matters and income tax rules are Ÿ Fill up the return form ( Form 1 or Form 4)
closely inter linked and it is obligatory to and
link your Aadhaar number and PAN Ÿ e-File the same directly online before the
number before planning. due date (30th September, 2021).

35

Important changes
Major changes in income tax have been
introduced from the last financial year
which will continue without much
changes during the current financial
year also.
Records to be preserved for 4 - 8
years
Almost all types of income (barring a
few exceptions) have now become
taxable but at different rates. The tax
returns also call for a number of details
which have to be preserved for 4-8
years. Maintaining the proper records
will be the future need of any tax payer.
36
Instead of maintaining the records with
different persons and collating them for
filing the returns, you can opt for Lifetime
digital record management services in
respect of your securities, insurance policies
and pension policies and make your life
simple.
IFEA has got a special arrangement with
Integrated Group to offer the above
facilities LIFETIME without any
maintenance or transaction charges in
future as a part of their CSR initiative.
Digilocker is an Application (
downloadable from Google Playstore)
where the documents can be stored.
Documents issued by State Governments,
educational institutions and insurance
companies can be stored in Digilocker which
are considered at par with original
documents as per Information Technology
Act,2000. Download the Digilocker App.,
select the documents from the list and
exercise your option to store them in digital
form.
IFEA can act as your additional record keeper
( disaster recovery) if you opt to share the
documents with IFEA at no cost.
Old Regime & New Regime
Old Regime
I. The tax payers are given two
options for selecting the income
tax rates: one with usual
deductions under normal rates iii.
and another without deductions
at a lower rate (115 BAC rate). iv.
ii. If a person opts for 115BAC lower
tax rates, he cannot claim the
normal deductions available like
house rent allowance, 80- C
deductions, 80-D deduction for
health insurance, 80G deduction v.
fo r d o n a t i o n s t o a p p ro ve d
institutions etc. It is advisable to opt
for the existing normal tax rates
37
New Regime
instead of opting lower tax rates without
normal deductions, if you are looking at
long term savings.
Capital gains from sale of listed equity
shares are taxable at lower rates.
Tax rates for capital gains (i.e. 10% for
STT paid long term capital gains and
15% for STT paid short term capital
gains) will apply irrespective of the
options exercised or the quantum of
capital gains.
Dividend income which was exempt in
individual's hands is now included in
computing the total income and taxed
at normal tax rates.
Tax Rate Reckoner on different types of
Income at different income levels

(Applicable rate + Cess + Surcharge)

Income Normal Dividend STCG LTCG

rate

upto Rs.2,50,000 - - - -

Rs.2,50,000 - Rs.5,00,000 - - - -

Rs.5,00,000 - Rs.10,00,000 20.80 20.80 15.60 10.40

Rs.5,00,000 - Rs.750000 (115 BAC) 10.40 10.40 10.40 10.40

Rs.750000 - Rs.10,00,000 (115 BAC) 15.60 15.60 15.60 10.40

Rs.10,00,000 - Rs.12,50,000 (115 BAC) 20.80 20.80 15.60 10.40

Rs.12,50,000 - Rs.15,00,000 (115 BAC) 26.00 26.00 15.60 10.40

Rs.10 lacs to Rs.50 lacs 31.20 31.20 15.60 10.40

Rs.50 lacs to Rs.1 crore 34.32 34.32 17.16 11.44

Rs.1 crore to Rs.2 crores 35.88 35.88 17.94 11.96

Rs.2 crores to Rs.5 crores 39.00 35.88 19.50 13.00

Rs.5 crores and above 42.74 35.88 21.37 14.25

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Comparison between Existing & 115BAC rates

Special tax Rate (115BAC) for Individual and HUFs

Note 1:

A resident individual (whose net income does not exceed

Rs. 5,00,000) can avail rebate under section 87A. It is
deductible from income-tax before calculating education
cess. The amount of rebate is 100 per cent of income-tax or
Rs. 12,500, whichever is less.
Note 2:
The option to pay tax at lower rates shall be available only
if the total income of assessee is computed without
claiming specified exemptions or deductions.
Note 3:
To simply put, if your Deductions/ Exemptions in a year
exceeds Rs. 2.50 Lakhs, you may stick to old regime.
New regime would be suitable for some sections of
people such as younger generation who lives along
with parents/ own a house and does not have any need
for claiming HRA / Home Loan. Also, it might suite
some senior citizens who do not get the benefit of
standard deduction and does not invest in Bank
Deposits to get the benefit of 80 TTB.

39
Tax return filing and future planning

(A) For income earners of less than Rs.5 lakhs:

Ÿ Download your 26AS statement from the income tax portal and check
for any TDS or other information.
Ÿ The basic income tax exemption limit is retained at Rs.2.50 lakhs only
and the tax payable in respect of income up to Rs.5.00 lakhs is given by
way of rebate under section 87A of the Act.
Ÿ Therefore, you should file the return promptly and claim the rebate
under section 87A.
Ÿ If tax has been deducted at source and reflected in your 26AS
statement, the amount so deducted will also be refunded.

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Tax return filing and future planning

(B) For income earners earning between Rs.5 lakhs and Rs.7.5 lakhs:
Ÿ Download your 26AS statement from the website of income tax
department.
Ÿ Verify the details given in your 26AS statements before filing the
income tax return.
Ÿ Opt for conversion of your HRA into employers direct investment into NPS
scheme (if possible).
Ÿ Save a minimum of 10% your income towards term insurance, health
insurance and NPS (5% towards term and health insurance; 5% towards
NPS is ideal). This will enable you to reduce your taxable income to
Rs.5 lakhs and avail the 87A rebate.
Ÿ File your income tax return promptly and claim 87A rebate. The rebate
is available only if you file your return.
Ÿ New rates (115BAC rate) are prescribed for persons who cannot save or
plan their future and not for others. 115 BAC rates are optional and not
beneficial to persons who plan for future.

Save a minimum of 10% your income towards term insurance, health

insurance and NPS (5% towards term and health insurance; 5%
towards NPS is ideal). This will enable you to reduce your taxable
income to Rs.5 lakhs and avail the 87A rebate.

41
Tax return filing and future planning

(C) For income earners of more than Rs.7.5 lakhs

Ÿ Download your 26AS statement from the website of income tax
department.
Ÿ Verify the details given in your 26AS statements before filing the
income tax return. Convert your HRA into employers direct investment
into NPS scheme (if possible).
Ÿ Save a minimum of 10% your income towards term insurance, health
insurance and NPS Surplus can be used for MF ELSS investment or equity
share investment. MF ELSS will take care of your balance 80C
requirements.
Ÿ Equity share investments can give you capital appreciation with lower tax
rates. Another reason is, dividend income is taxable at normal rates.

Save a minimum of 10% your income towards term insurance, health

insurance and NPS Surplus can be used for MF ELSS investment or
equity share investment. MF ELSS will take care of your balance 80C
requirements.

42
Tax return filing and future planning
(D) For income earners of more than Rs.10 lakhs up to 15 lakhs and even above:
Ÿ Download your 26AS statement from the website of income tax
department.
Ÿ Verify the details given in your 26AS statements before filing the
income tax return. Your marginal tax rate is 31.2% which can tempt you
to opt for new 115 BAC rates.
Ÿ When you opt for new 115 BAC optional rates, most of the allowances and
Chapter VIA benefits will not be available. 115 BAC rates are prescribed
for persons who cannot save or plan their future and not for others.
115 BAC rates are optional and not beneficial to persons who plan for
future.
Ÿ Opt for conversion of your HRA into employers direct investment into NPS
scheme (if possible)
Ÿ Save a minimum of 10% your income towards term insurance, health
insurance and NPS Surplus can be used for MF ELSS investment or equity
share investment. MF ELSS will take care of your balance 80C
requirements.
Ÿ Equity share investments can give you capital appreciation with lower tax
rates. From the current financial year, dividend income is fully taxable and
long term capital gains will be exempt up to Rs.1 lac only. But the tax rates
on short term a long term capital gains in respect of listed equity
shares/equity mutual funds is 50%-60% less compared to normal tax
rates. If you are familiar with investments in equity shares, you must
consider investing a small portion of your income in equity shares or
equity linked savings schemes.

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Presumptive Tax Planning for Professionals/ Business persons

Understanding the rules and regulations: For Professionals / Businessmen

Ÿ Financial matters and income tax rules are closely inter linked and it is
obligatory to link your Aadhaar number and PAN number before planning.
Ÿ There is no compulsion to maintain detailed books of account for audit if
your total income is less than ₹50 lacs per annum.
Ÿ If you are familiar with computer systems, you can even download “tax return
preparation” utilities, fill up the return form ( Form 1 or Form 4) and e-file the
same online before the due date.
Presumptive tax return:( 44AD/ADA return)
Any person having a taxable income of ₹2.50 lacs and more but less than ₹50
lacs need not maintain detailed books of account and can opt for “ presumptive
tax payment by filing a return in Form 4. Presumptive income will be calculated
as 50% of professional revenue or8% of cash turnover and 6% of “digital
transactions” for business persons.

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Some important points to remember while filing the
return under presumptive basis
(1) This facility is available to professional people having professional income
upto ₹50 lacs and business people having a turnover of less than ₹2 crores.
GST registration is necessary if the professional revenue
(2) Professional services include legal, medical, engineering, architect,
accountancy, technical consultancy.
(3) 50% of the professional income will be considered as “presumptive income”
and tax levied on that basis. A higher rate can also be admitted if the net
assets created during the year exceeds the presumptive income.
(4) The same rule applies for business people ( including partnership firms but
not LLPs) also with presumptive income being calculated as 8% of cash
turnover and 6% of turnover done through digital transactions.
(5) Other tax deduction provisions such as relating to standard deduction for
salaries ( section 16), EMI on housing loan (Section 24) , 80- C benefits, 80-D
health insurance premium, 80-CC NPS contribution, 80G donations etc. are
applicable for individuals paying tax on “ presumptive income” basis . (not
applicable to firms)
(6) A new tax rate (115BAC) has been introduced (optional) but if you opt for this
rate, most of the deductions will not be available. A financial prudent person
should opt for normal rates only and claim all applicable deductions.
(7) The “TRACES” website of the Income Tax Department (26AS statement) will
contain all information pertaining to tax deducted at source, tax collected
by tax collectors on your behalf, GST details, high value transactions in
shares, mutual funds etc, advance tax paid etc. Confirm for yourself
whether these information are fully reflected in the Income Tax return
before filing.

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46
Summary : Tax Return Filing and Planning:
(1) When you are e-filing your Income tax returns, do not opt for 115BAC (lower
tax) rates as you will be foregoing a number of eligible deductions.
(2) If you are employed, invest your “standard deduction” amount (₹50,000) into
eligible necessities (life, health, retirement) like term insurance, health
insurance, ELSS, NPS and claim double deduction. (section 16, section 80C,
80CC and Section 80D).
(3) If you are getting HRA, opt for getting it converted into employer’s direct
contribution to NPS. You can even now claim section 24 deduction (upto 2
lacs) in respect of your housing loan EMI and also 80GG deduction for rent
payment (upto ₹50,000) by proper financial planning.
(4) For professional people and business persons paying GST, 2 times of GST
amount will be approximately cover 15% of their income. They can opt for
“presumptive tax “ in respect of their business/ professional income and
claim all other eligible deductions.
(5) First, allocate 15% of your total income towards term and health insurance,
ELSS, NPS as 5:5:5 formula. (nearly 10% would be done automatically
through standard deduction formula). If you have some more surplus
funds, allocate another 5% towards ‘limited period payment’ endowment
plan which gives “ assured sum on death” even upto 100 years and 80C
deduction . This will take care of your “ unpredictable “succession plan also
to a limited extent.
(6) Open a demat or second demat account with Integrated (without
maintenance charges, making record management easy) and invest in ELSS
of any of the mutual funds either under SIP or as a lump sum. You can take

47
Summary : Tax Return Filing and Planning:
an insurance policy ( term/ health/ endowment etc) of your choice also
through Integrated. NPS plans are also available with Integrated. Prepare a
monthly cash flow plan also to avoid ‘ bouncing of payment instructions”
(7) If you have surplus funds for investment, you can opt for selected
“equity based mutual funds”, to avail the Lower tax rates on their redemption
in case of need. Direct equity share investment is another choice.
(8) If you have a passion for trading, you can do occasional trading by pledging a
part of your mutual fund units/ equity shares as a security
(9) Security based exposure margin(SBEM) trading: This is a part of ‘integrated’s”
business activities. The investor sets apart a portion of his idle investments (
i.e. medium and long term investments like mutual funds) as “ margin
money” and trades in equity shares on intraday/ delivery basis( T+<7) upto
7 days. The profit/ loss on “delivery based” trading is treated as short term
capital gains taxable at 15% tax rate.
Caution: Do not set apart more than 10% of your long term investment for
SEBM trading.
(10) Even if you are a passionate equity investor, the investment in shares and
mutual funds should be in the range of (100-your age) % of your total
wealth only.
(11) Never borrow money to invest in shares.

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Tax Planning as an investment and protection
mechanism:
First step:
Determine the minimum amount and maximum amount you can save, based
upon your annual total income and personal needs.
(1) If you are employed, 12% of your salary income (excluding allowances) will
be accumulated automatically in your PF account as your own contribution
with 80C deduction. Employer’s contribution will be another 12%. There is
thus an automatic indirect savings cum investment of 12%-15% of your income
for your retirement and future needs.
(2) If you have a home loan EMI commitment, EMI commitment (eligible for tax
deduction) need not exceed 30% of your total income, subject to a maximum of
Rs. 3 lacs per annum ( Loan amount should not exceed ₹35 lacs). Rs.2 lacs is
eligible for deduction under section 24 and another Rs.1.00 lac can be availed
under section 80-C within the overall limit of Rs.1,50,000.
(3) Term insurance is a must for all married persons to protect the family
members. The minimum assured sum assured should be around 10 times of
personal annual income or 20 times of ( annual total family expenses including
EMI). If the spouse is also an earning member, his/her income can be deducted
in calculating the family expenses.
(4) The annual insurance premium should not exceed 10% of the sum assured (death
claim) to claim tax deduction. For example, if the sum assured is Rs.10 lacs, the
annual premium should not exceed Rs.1 lac. The intention is to discourage
short duration policies for investment purposes.
(5) Deferred annuity plans are also available for “investment cum protection“
whereby the “annuitant” will get monthly return (pension) after some period

50
 but they are eligible for 80C benefits only if the annual insurance premium is less
than 10% of the sum assured.
(6) The life and health insurance regular premium amount (eligible for tax deduction)
should preferably be not more than 10% of your annual total income. Standard
term insurance plans (upto Rs.50 lacs sum assured) and health insurance plans
(upto Rs. 10 lacs) are available with insurance companies. (allocating
5%towards term and health insurance , 5% towards NPS is ideal).
(7) Surplus savings (upto 5% of annual income) can be utilised for investment in
“ELSS” (equity linked savings scheme) of mutual funds to avail 80-C tax benefits .
These investments can be made through a demat account either under SIP
(systematic investment plan) or as lumpsum payment. Even if you are already
having a demat account for trading purposes, a new additional account can be
opened with Integrated with a SIP investment of your choice without any
maintenance charges. This will facilitate easy maintenance of records and also
helpful in enjoying section 87A rebate when your total income exceeds ₹5 lacs
marginally.
(8) Another 10% of your salary can be set apart as your contribution under NPS.
which is eligible for a separate tax deduction (upto Rs.50000)
(9) Do not invest in insurance policies beyond your needs because insurance is not an
investment.
(10) Section 80D,80DD and 80DDB deductions relating to "mediclaim " are available
even in respect of actual medical expenses incurred on one's own health or any
member of the family upto the prescribed limits , provided the payment is made by
any mode other than cash. (However, payment for preventive health check up in
cash upto Rs.5000 is permitted)

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52
Final step:
(1) Open an exclusive bank account for “prudence financial planning”. If you have
more than one bank account, use one account exclusively for this purpose.
(2) Make a voluntary contribution to IFEA (a not for profit section 8 company)
and claim 80G tax benefits (app.15% of your contribution will be the tax
relief). This contribution will enable you to plan your personal career and skill
development by undergoing any course under any institution of your choice
on self learning basis at your own pace and even claim scholarship on
successful completion of the course.
(3) Download “Digilocker” application from Google play store ; and view the
list of institutions from home page whose “issued documents” are at par with
original documents as per IT Act,2000. (102 Educational institutions, 35
insurance companies and 36 State Governments issue documents which can
be kept in digital form in DigiLocker).
(4) Select the documents for which you are eligible and exercise your option to
digitise them in DigiLocker. Download them as PDF and share it with IFEF by
email or what’s app. IFEF will act as an “Additional (disaster recovery)
DigiLocker” for your documents. You can upload other documents also (at
your option) but they shall not be treated at par with original documents as
per IT Act.
(5) Open a Demat account (with trading facilities, and without any
maintenance charges ) and NPS account ( with NSDL) through INTEGRATED
mainly as a part of practical record management experience towards “ prudence
financial planning”. Even If you are already having a Demat account with
another DP, you can open your exclusive second Demat account with

53
 Integrated which offers the following facilities:
(1) No account maintenance charges in future
(2) Demat of existing physical shares, transfer of securities, pledging facilities
etc. without charges
(3) Trading facilities with exposure margin against securities
(4) Holding mutual funds, bonds and debentures, gold bonds etc. in Demat
form
(5) Life time record management facilities to file income tax returns, claim
lower tax rate for delivery based transactions
(6) Digital Record management facilities for insurance policies, pension
schemes etc
(7) Free access to digital library.
(6) Maintain a financial discipline by transferring funds periodically to the
exclusive bank account mentioned in (1) as follows:
(a) if a salaried person, transfer not less than 15% of net home pay
(b) if a professional paying GST, transfer not less than TWO times of GST
payment
(c) if a professional not paying any GST, transfer not less than 10% to 12% of
your gross revenue.
(d) if a business person paying composition tax, transfer not less than TWO
times of GST payment.
(e) if a business person paying normal GST, transfer not less than TWO times
of net GST ( I.e. after input tax credit)
(7) Utilise this bank account only for paying insurance premium, ELSS of your
choice and NPS account.
(8) Ultimately, you can use the services of IFEA, DigiLocker and INTEGRATED as
“Lifetime , reliable and flexible Associates” acting in your interest at practically
no cost and that too with 80G tax benefits.

54
 Buying insurance cannot
change your life but it
prevents your lifestyle
from being changed. An
illness can wipe up an
entire family’s savings that
they have saved for
decades by the medical
bills.

You will not turn

bankrupt because of
buying insurance but you
will cause your loved ones
to turn bankrupt if you
don’t

- JACK MA -

55
Equity investment is a part of Smart Planning

A smart investor is a person who makes best use of his existing long term
investments. Knowing that the income tax rates vary based upon the type of
investment and period of holding, it will have an indirect effect on net return. A
person can opt for paying LTCG or STCG as capital gains tax (which is lower than
his existing slab) by investing in equity shares/equity mutual funds and selling
them periodically.
(a) Listed equity shares/mutual funds are considered as “long term capital
assets” when they are held for more than one year. Acquiring, holding and
selling after one year for profit is treated as a long term capital gain
(10%).

56
(b) Investments in listed equity shares can be offered as security for meeting
trading margin requirements and the profit from such “delivery based
trading” is treated as a short term capital gain eligible for 15% tax rate.
(c) Even losses can be carried forward and adjusted against future years'
similar type of income.
(d) The Government also earns revenue by way of stamp duty, Securities
Transaction Tax (STT) and GST.
Important Provisions relating to Capital Gains Tax

Acquisition Date of Cost of

methods acquisition acquisition
Acquired By GIFT Date of acquisition Cost to the
by the Donor Original Donor
Rights Shares Date of Allotment Issue Price
Renunciation of Date of Zero
Rights Renunciation
Bonus Shares Date of Allotment Zero
Merger / Demerger Date of acquisition Cost of the
/ Amalgamation of the original asset original Asset
Convertible shares Date of Conversion Conversion Price

57
Capital Gains Calculation

Table showing the Period and Cost of Holding and

Tax Rates for Capital Gains Calculation

Listed Securities / Equity Oriented Units (MF)

Short term Tax rate Long term Tax rate
<12 months 15.6% >12 months 10.4%

Listed Debt instruments / Unlisted Shares /

Immovable properties
Short term Tax rate Long term Tax rate
<24 months Normal >24 months 20% with indexation

Unlisted Debts / Debt Mutual Funds

Short term Tax rate Long term Tax rate
<36 months Normal >36 months 20% with indexation

58
Equity Investor is a Smart Investor
1) Who is a Smart Investor?
A smart investor is a person who makes best use of his existing “idle” investments.
He knows that the income tax rates vary based upon the type of investment and
period of holding which will have an indirect effect on net return.
(2) For example, have you any idea of Income Tax you have to pay for saving Rs
1 Lac?
Income Range 5-10 Lakhs > Than 10 Lakhs
Marginal Tax Rate 20.80% 31.20%
Normal 26,263 45,349
STCG 18, 483 18,483
LTCG 11,607 11,607
(3) How does a SMART Investor use his existing idle investments?
A smart investor will opt for paying 11,607 or 18,483 as capital gains tax by
investing in equity shares/equity mutual funds and selling them periodically.
(4) How is it possible?
(a) Listed equity shares/mutual funds are considered as “long term capital
assets” when they are held for more than one year. Acquiring, holding and
selling after one year for profit is treated as a long term capital gain
eligible for lower tax rate (10%).
(b) Even idle investments in listed equity shares can be offered as a “pledged
security” for margin trading and the profit from such “delivery based
trading” is treated as a short term capital gain eligible for 15% lower tax
rate.
(c) Even losses can be carried forward and adjusted against future years
similar type of income.
(d) The Govt. also earns revenue by way of stamp duty , Securities Transaction
Tax and GST.

59
 Did you know?
How a difference of 1% in
Rate of Return can affect
your Investment?

Amount invested Rs.10,000/- p.m.

for 20 years would grow to

7% 8% 9% 10%

Rs.52,09,267 Rs.58,90,204 Rs.66,78,869 Rs.75,93,688

Equity is the best asset class that can

generate better return in long run.

Best way to invest in Equity is

through Mutual Funds.

Simplest approach to invest in

Mutual Funds is through SIP.

SIP
Systematic Investment Plan
A simple way to create wealth over long term
Invest Early ... Invest Regularly ... Redeem only if necessary...
Plan for your Financial goals & Stay relaxed even in Volatile Market !!!

60
 Table : To earn Rs.1,00,000 after TAX
how much you should earn
before Tax in various scenarios

Other Equity
Income Investments Investments
Normal rate STCG LTCG
upto Rs.2,50,000 1,00,000 1,00,000 1,00,000
Rs.2,50,000 to Rs.5,00,000 1,00,000 1,00,000 1,00,000
Rs.5,00,000 to Rs.10,00,000 1,26,263 1,18,483 1,11,607
Rs.5,00,000 to Rs.7,50,000 (115 BAC) 1,11,607 1,11,607 1,11,607
Rs.7,50,000 to Rs.10,00,000 (115 BAC) 1,18,483 1,18,483 1,11,607
Rs.10,00,000 to Rs.12,50,000 (115 BAC) 1,26,263 1,18,483 1,11,607
Rs.12,50,000 to Rs.15,00,000 (115 BAC) 1,35,135 1,18,483 1,11,607
Rs.10 lacs to Rs.50 lacs 1,45,349 1,18,483 1,11,607
Rs.50 lacs to Rs.1 crore 1,52,253 1,20,715 1,12,918
Rs.1 crore to Rs.2 crores 1,55,958 1,21,862 1,13,585
Rs.2 crores to Rs.5 crores 1,63,934 1,24,224 1,14,943
Rs.5 crores and above 1,74,654 1,27,181 1,16,615

For instance, a person in Rs. 10 Lakhs slab has to earn Rs.1,45,349 to retain Rs. 1 Lakh
after tax at normal rates. But he would retain the same Rs. 1 Lakh even if he earns
Rs. 1,18,483 (subject to STCG) and Rs. 1,11,607 (subject to LTCG). It is advisable for
the High Income earners to opt for Equity Oriented Investments since the taxation
is lesser than their normal tax slabs.

61
We are giving complete details of tax rates applicable and effective net return at
different levels of income and different types of income in the following tables:

Table Showing the Gross Equivalent Return

available for different tax rates (Normal, STCG or LTCG)
for selected rates of return

6% 8% 10%

Normal

Normal
Income

Income
Normal
Income

STCG

LTCG
Income range

STCG

LTCG
STCG

LTCG
upto Rs.2,50,000 6.00 6.00 6.00 8.00 8.00 8.00 10.00 10.00 10.00

Rs.2,50,000 to Rs.5,00,000 6.00 6.00 6.00 8.00 8.00 8.00 10.00 10.00 10.00

Rs.5,00,000 to Rs.10,00,000 7.58 7.11 6.70 10.10 9.48 8.93 12.63 11.85 11.16

Rs.5,00,000 to Rs.7,50,000 (115 BAC) 6.70 6.70 6.70 8.93 8.93 8.93 11.16 11.16 11.16

Rs.7,50,000 to Rs.10,00,000 (115 BAC) 7.11 7.11 6.70 9.48 9.48 8.93 11.85 11.85 11.16

Rs.10,00,000 o Rs.12,50,000 (115 BAC) 7.58 7.11 6.70 10.10 9.48 8.93 12.63 11.85 11.16

Rs.12,50,000 to Rs.15,00,000 (15 BAC) 8.11 7.11 6.70 10.81 9.48 8.93 13.51 11.85 11.16

Rs.10 lacs to Rs.50 lacs 8.72 7.11 6.70 11.63 9.48 8.93 14.53 11.85 11.16

Rs.50 lacs to Rs.1 crore 9.14 7.24 6.78 12.18 9.66 9.03 15.23 12.07 11.29

Rs.1 crore to Rs.2 crores 9.36 7.31 6.82 12.48 9.75 9.09 15.60 12.19 11.36

Rs.2 crores to Rs.5 crores 9.84 7.45 6.90 13.11 9.94 9.20 16.39 12.42 11.49

Rs.5 crores and above 10.48 7.63 7.00 13.97 10.17 9.33 17.47 12.72 11.66

For instance, a person in Rs. 10 Lakhs slab has to make a return of 8.72 in other
investments to get a net return of 6%. Whereas, he can make the same 6 %
return after tax, if he invests in equity that is fetching 7.11 in the short term or
6.70 in the long term.

62
 Table Showing the Return available
after payment of Tax (Normal, STCG or LTCG )
for selected rates of Net Return

6% 8% 10%

Normal
Normal

Income
Income

Normal
Income
STCG

LTCG

STCG

LTCG
LTCG
Income range

STCG
upto Rs.2,50,000 6.00 6.00 6.00 8.00 8.00 8.00 10.00 10.00 10.00

Rs.2,50,000 to Rs.5,00,000 6.00 6.00 6.00 8.00 8.00 8.00 10.00 10.00 10.00

Rs.5,00,000 to Rs.10,00,000 4.75 5.06 5.38 6.34 6.75 7.17 7.92 8.44 8.96

Rs.5,00,000 to Rs.7,50,000 (115 BAC) 5.38 5.38 5.38 7.17 7.17 7.17 8.96 8.96 8.96

Rs.7,50,000 to Rs.10,00,000 (115 BAC) 5.06 5.06 5.38 6.75 6.75 7.17 8.44 8.44 8.96

Rs.10,00,000 o Rs.12,50,000 (115 BAC) 4.75 5.06 5.38 6.34 6.75 7.17 7.92 8.44 8.96

Rs.12,50,000 to Rs.15,00,000 (15 BAC) 4.44 5.06 5.38 5.92 6.75 7.17 7.40 8.44 8.96

Rs.10 lacs to Rs.50 lacs 4.13 5.06 5.38 5.50 6.75 7.17 6.88 8.44 8.96

Rs.50 lacs to Rs.1 crore 3.94 4.97 5.31 5.25 6.63 7.08 6.57 8.28 8.86

Rs.1 crore to Rs.2 crores 3.85 4.92 5.28 5.13 6.56 7.04 6.41 8.21 8.80

Rs.2 crores to Rs.5 crores 3.66 4.83 5.22 4.88 6.44 6.96 6.10 8.05 8.70

Rs.5 crores and above 3.44 4.72 5.15 4.58 6.29 6.86 5.73 7.86 8.58

For instance a person in Rs. 10 lakhs slab would get a net return of 4.13% after tax
for a gross return of 6%. The same investment, if made in equity for a short term
and assuming 6 % gross return, net would be 5.06% and for long term it would be
5.38%.

63
 Table showing the comparison of tax, investment, net cash flow etc.
under normal tax rates and 115 BAC rates

(inc. dividend)

Tax difference
Other income

Net cash flow

115 BAC rate
Normal rate
Allowances

Chapter VIA
Cash Inflow
Total salary

Cash Flow

difference
Cash flow
with HRA

Taxable
income
Salary

Total

invt.
3,25,000 50,000 3,75,000 1,25,000 5,00,000 - 4,50,000 - 5,00,000 12,500 4,87,500 12,500 -12,500

3,50,000 50,000 4,00,000 1,25,000 5,25,000 - 4,75,000 - 5,25,000 15,000 5,10,000 15,000 -15,000

3,75,000 50,000 4,25,000 1,25,000 5,50,000 25,000 4,75,000 - 5,25,000 17,500 5,32,500 17,500 7,500

4,00,000 50,000 4,50,000 1,25,000 5,75,000 50,000 4,75,000 - 5,25,000 20,000 5,55,000 20,000 30,000

4,25,000 50,000 4,75,000 1,25,000 6,00,000 75,000 4,75,000 - 5,25,000 22,500 5,77,500 22,500 52,500

4,50,000 50,000 5,00,000 1,25,000 6,25,000 1,00,000 4,75,000 - 5,25,000 25,000 6,00,000 25,000 75,000

4,75,000 50,000 5,25,000 1,25,000 6,50,000 1,25,000 4,75,000 - 5,25,000 27,500 6,22,500 27,500 97,500

5,00,000 50,000 5,50,000 1,25,000 6,75,000 1,50,000 4,75,000 - 5,25,000 30,000 6,45,000 30,000 1,20,000

5,50,000 50,000 6,00,000 1,25,000 7,25,000 2,00,000 4,75,000 - 5,25,000 35,000 6,90,000 35,000 1,65,000

6,00,000 50,000 6,50,000 1,25,000 7,75,000 2,50,000 4,75,000 - 5,25,000 41,250 7,33,750 41,250 2,08,750

6,50,000 50,000 7,00,000 1,25,000 8,25,000 2,50,000 5,25,000 17,500 5,57,500 48,750 7,76,250 31,250 2,18,750

7,00,000 50,000 7,50,000 1,25,000 8,75,000 2,50,000 5,75,000 27,500 5,97,500 56,250 8,18,750 28,750 2,21,250

7,50,000 50,000 8,00,000 1,25,00 0 9,25,000 2,50,000 6,25,000 37,500 6,37,500 63,750 8,61,250 26,250 2,23,750

8,00,000 50,000 8,50,000 1,25,000 9,75,000 2,50,000 6,75,000 47,500 6,77,500 71,250 9,03,750 23,750 2,26,250

8,50,000 50,000 9,00,000 1,25,000 10,25,000 2,50,000 7,25,000 57,500 7,17,500 80,000 9,45,000 22,500 2,27,500

9,00,000 50,000 9,50,000 1,25,000 10,75,000 2,50,000 7,75,000 67,500 7,57,500 90,000 9,85,000 22,500 2,27,500

9,50,000 50,000 10,00,000 1,25,000 11,25,000 2,50,000 8,25,000 77,500 7,97,500 1,00,000 10,25,000 22,500 2,27,500

10,00,000 50,000 10,50,000 1,25,000 11,75,000 2,50,000 8,75,000 87,500 8,37,500 1,10,000 10,65,000 22,500 2,27,500

10,50,000 50,000 11,00,000 1,25,000 12,25,000 2,50,000 9,25,000 97,500 8,77,500 1,20,000 11,05,000 22,500 2,27,500

11,00,000 50,000 11,50,000 1,25,000 12,75,000 2,50,000 9,75,000 1,07,500 9,17,500 1,31,250 11,43,750 23,750 2,26,250

11,50,000 50,000 12,00,000 1,25,000 13,25,000 2,50,000 10,25,000 1,20,000 9,55,000 1,43,750 11,81,250 23,750 2,26,250

12,00,000 50,000 12,50,000 1,25,000 13,75,000 2,50,000 10,75,000 1,35,000 9,90,000 1,56,250 12,18,750 21,250 2,28,750

12,50,000 50,000 13,00,000 1,25,000 14,25,000 2,50,000 11,25,000 1,50,000 10,25,000 1,68,750 12,56,250 18,750 2,31,250

13,00,000 50,000 13,50,000 1,25,000 14,75,000 2,50,000 11,75,000 1,65,000 10,60,000 1,81,250 12,93,750 16,250 2,33,750

13,50,000 50,000 14,00,000 1,25,000 15,25,000 2,50,000 12,25,000 1,80,000 10,95,000 1,95,000 13,30,000 15,000 2,35,000

14,00,000 50,000 14,50,000 1,25,000 15,75,000 2,50,000 12,75,000 1,95,000 11,30,000 2,10,000 13,65,000 15,000 2,35,000

14,50,000 50,000 15,00,000 1,25,000 16,25,000 2,50,000 13,25,000 2,10,000 11,65,000 2,25,000 14,00,000 15,000 2,35,000

15,00,000 50,000 15,50,000 1,25,000 16,75,000 2,50,000 13,75,000 2,25,000 12,00,000 2,40,000 14,35,000 15,000 2,35,000

Note: tax benefits relating to Housing loan, HRA etc are not considered for the sake of simplicity

64
 Standard Tax Planner table
Term Insurance (for Families earning around Rs.15 lacs in a year)

Total / Real %
Real income

Tax Payable

115BAC tax
Deduction

assessable

Tax Saved
Deduction
Mediclaim

investment %
(indirect retun)
Standard
MF ELSS

Tax saved /
income
80GG

Tax %
Total
Total
15%
NPS
3%

Net
5%

5%
2%

3,00,000 9,000 6,000 15,000 15,000 45,000 50,000 30,000 125,000 175,000 - - - - 15.00 -

3,50,000 10,500 7,000 17,500 17,500 52,500 50,000 35,000 137,500 212,500 - - - - 15.00 -

4,00,000 12,000 8,000 20,000 20,000 60,000 50,000 40,000 150,000 250,000 - - - - 15.00 -

4,50,000 13,500 9,000 22,500 22,500 67,500 50,000 45,000 162,500 287,500 - - - - 15.00 -

5,00,000 15,000 10,000 25,000 25,000 75,000 50,000 50,000 175,000 325,000 - - - - 15.00 -

5,50,000 16,500 11,000 27,500 27,500 82,500 50,000 55,000 187,500 362,500 - - 17,500 17,500 15.00 21.21

6,00,000 18,000 12,000 30,000 30,000 90,000 50,000 60,000 200,000 400,000 - - 22,500 22,500 15.00 25.00

6,50,000 19,500 13,000 32,500 32,500 97,500 50,000 60,000 207,500 442,500 - - 27,500 27,500 15.00 28.21

7,00,000 21,000 14,000 70,000 50,000 155,000 50,000 60,000 265,000 435,000 - - 32,500 32,500 22.14 20.97

7,50,000 22,500 15,000 80,000 80,000 197,500 50,000 60,000 307,500 442,500 - - 37,500 37,500 26.33 18.99

8,00,000 24,000 16,000 85,000 80,000 205,000 50,000 60,000 315,000 485,000 - - 45,000 45,000 25.63 21.95

8,50,000 25,500 17,000 85,000 80,000 207,500 50,000 60,000 317,500 532,500 19,000 2.24 52,500 33,500 24.41 16.14

9,00,000 27,000 18,000 85,000 80,000 210,000 50,000 60,000 320,000 580,000 28,500 3.17 60,000 31,500 23.33 15.00

9,50,000 28,500 19,000 85,000 80,000 212,500 50,000 60,000 322,500 627,500 38,000 4.00 67,500 29,500 22.37 13.88

10,00,000 30,000 20,000 85,000 80,000 215,000 50,000 60,000 325,000 675,000 47,500 4.75 75,000 27,500 21.50 12.79

10,50,000 31,500 21,000 85,000 80,000 217,500 50,000 60,000 327,500 722,500 57,000 5.43 85,000 28,000 20.71 12.87

11,00,000 33,000 22,000 85,000 80,000 220,000 50,000 60,000 330,000 770,000 66,500 6.05 95,000 28,500 20.00 12.95

11,50,000 34,500 23,000 85,000 80,000 222,500 50,000 60,000 332,500 817,500 76,000 6.61 105,000 29,000 19.35 13.03

12,00,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 866,000 85,700 7.14 115,000 29,300 18.67 13.08

12,50,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 916,000 95,700 7.66 125,000 29,300 17.92 13.08

13,00,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 966,000 102,300 7.87 137,500 35,200 17.23 15.71

13,50,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 1,016,000 117,300 8.69 150,000 32,700 16.59 14.60

14,00,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 1,066,000 132,300 9.45 162,500 30,200 16.00 13.48

14,50,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 1,116,000 147,300 10.16 175,000 27,700 15.45 12.37

15,00,000 36,000 24,000 82,000 82,000 224,000 50,000 60,000 334,000 1,166,000 162,300 10.82 187,500 25,200 14.93 11.25

Note: Tax benefits (Sec 24, 80C) relating to housing loan are not considered for the sake of simplicity

65
 80G tax benefits at marginal income level ( 5.00 to 5.20 lacs)

Suggested Taxable
Benefit
80G Income Tax Tax Saved
%

500,000 - - - - - -

501,000 12,700 2,000 500,000 0 12,700 635

502,000 13,100 4,000 500,000 0 13,100 327.50

503,000 13,500 6,000 500,000 0 13,500 225.00

504,000 13,900 8,000 500,000 0 13,900 173.75

505,000 14,300 10,000 500,000 0 14,300 143.00

506,000 14,700 12,000 500,000 0 14,700 122.50

507,000 15,100 14,000 500,000 0 15,100 107.86

508,000 15,500 16,000 500,000 0 15,500 96.88

509,000 15,900 18,000 500,000 0 15,900 88.33

510,000 16,300 20,000 500,000 0 16,300 81.50

511,000 16,700 22,000 500,000 0 16,700 75.91

512,000 17,100 24,000 500,000 0 17,100 71.25

513,000 17,500 26,000 500,000 0 17,500 67.31

514,000 17,900 28,000 500,000 0 17,900 63.93

515,000 18,300 30,000 500,000 0 18,300 61.00

516,000 18,700 32,000 500,000 0 18,700 58.44

517,000 19,100 34,000 500,000 0 19,100 56.18

518,000 19,500 36,000 500,000 0 19,500 54.17

519,000 19,900 38,000 500,000 0 19,900 52.37

520,000 20,300 40,000 500,000 0 20,300 50.75

66
 ELSS tax benefits / Mediclaim/ NPS tax benefits
at marginal income level (5.00 to 5.20 lacs)

Suggested Taxable Benefit

Tax Tax Saved
ELSS Income %

500,000 - - - - - -

501,000 12,700 1,000 500,000 0 12,700 1270

502,000 13,100 2,000 500,000 0 13,100 655

503,000 13,500 3,000 500,000 0 13,500 450

504,000 13,900 4,000 500,000 0 13,900 347.50

505,000 14,300 5,000 500,000 0 14,300 286.00

506,000 14,700 6,000 500,000 0 14,700 245.00

507,000 15,100 7,000 500,000 0 15,100 215.71

508,000 15,500 8,000 500,000 0 15,500 193.75

509,000 15,900 9,000 500,000 0 15,900 176.67

510,000 16,300 10,000 500,000 0 16,300 163.00

511,000 16,700 11,000 500,000 0 16,700 151.82

512,000 17,100 12,000 500,000 0 17,100 142.50

513,000 17,500 13,000 500,000 0 17,500 134.62

514,000 17,900 14,000 500,000 0 17,900 127.86

515,000 18,300 15,000 500,000 0 18,300 122.00

516,000 18,700 16,000 500,000 0 18,700 116.88

517,000 19,100 17,000 500,000 0 19,100 112.35

518,000 19,500 18,000 500,000 0 19,500 108.33

519,000 19,900 19,000 500,000 0 19,900 104.74

520,000 20,300 20,000 500,000 0 20,300 101.50

67
 Standard Term Insurance Need

Sum assured on 20 times of family expenses

sum assured as

Estimated annual exp. as % of total take home

annual income
10 times of
Total Take
Home

50%
40%
25%
45%

50%
40%

30%
35%
25%

35%
30%

45%
5,00,000 50,00,000 1,25,000 1,50,000 1,75,000 2,00,000 2,25,000 2,50,000 25,00,000 30,00,000 35,00,000 40,00,000 45,00,000 50,00,000

5,50,000 55,00,000 1,37,500 1,65,000 1,92,500 2,20,000 2,47,500 2,75,000 27,50,000 33,00,000 38,50,000 44,00,000 49,50,000 55,00,000

6,00,000 60,00,000 1,50,000 1,80,000 2,10,000 2,40,000 2,70,000 3,00,000 30,00,000 36,00,000 42,00,000 48,00,000 54,00,000 60,00,000

6,50,000 65,00,000 1,62,500 1,95,000 2,27,500 2,60,000 2,92,500 3,25,000 32,50,000 39,00,000 45,50,000 52,00,000 58,50,000 65,00,000

7,00,000 70,00,000 1,75,000 2,10,000 2,45,000 2,80,000 3,15,000 3,50,000 35,00,000 42,00,000 49,00,000 56,00,000 63,00,000 70,00,000

7,50,000 75,00,000 1,87,500 2,25,000 2,62,500 3,00,000 3,37,500 3,75,000 37,50,000 45,00,000 52,50,000 60,00,000 67,50,000 75,00,000

8,00,000 80,00,000 2,00,000 2,40,000 2,80,000 3,20,000 3,60,000 4,00,000 40,00,000 48,00,000 56,00,000 64,00,000 72,00,000 80,00,000

8,50,000 85,00,000 2,12,500 2,55,000 2,97,500 3,40,000 3,82,500 4,25,000 42,50,000 51,00,000 59,50,000 68,00,000 76,50,000 85,00,000

9,00,000 90,00,000 2,25,000 2,70,000 3,15,000 3,60,000 4,05,000 4,50,000 45,00,000 54,00,000 63,00,000 72,00,000 81,00,000 90,00,000

9,50,000 95,00,000 2,37,500 2,85,000 3,32,500 3,80,000 4,27,500 4,75,000 47,50,000 57,00,000 66,50,000 76,00,000 85,50,000 95,00,000

10,00,000 1,00,00,000 2,50,000 3,00,000 3,50,000 4,00,000 4,50,000 5,00,000 50,00,000 60,00,000 70,00,000 80,00,000 90,00,000 1,00,00,000

10,50,000 1,05,00,000 2,62,500 3,15,000 3,67,500 4,20,000 4,72,500 5,25,000 52,50,000 63,00,000 73,50,000 84,00,000 94,50,000 1,05,00,000

11,00,000 1,10,00,000 2,75,000 3,30,000 3,85,000 4,40,000 4,95,000 5,50,000 55,00,000 66,00,000 77,00,000 88,00,000 99,00,000 1,10,00,000

11,50,000 1,15,00,000 2,87,500 3,45,000 4,02,500 4,60,000 5,17,500 5,75,000 57,50,000 69,00,000 80,50,000 92,00,000 1,03,50,000 1,15,00,000

12,00,000 1,20,00,000 3,00,000 3,60,000 4,20,000 4,80,000 5,40,000 6,00,000 60,00,000 72,00,000 84,00,000 96,00,000 1,08,00,000 1,20,00,000

12,50,000 1,25,00,000 3,12,500 3,75,000 4,37,500 5,00,000 5,62,500 6,25,000 62,50,000 75,00,000 87,50,000 1,00,00,000 1,12,50,000 1,25,00,000

13,00,000 1,30,00,000 3,25,000 3,90,000 4,55,000 5,20,000 5,85,000 6,50,000 65,00,000 78,00,000 91,00,000 1,04,00,000 1,17,00,000 1,30,00,000

13,50,000 1,35,00,000 3,37,500 4,05,000 4,72,500 5,40,000 6,07,500 6,75,000 67,50,000 81,00,000 94,50,000 1,08,00,000 1,21,50,000 1,35,00,000

14,00,000 1,40,00,000 3,50,000 4,20,000 4,90,000 5,60,000 6,30,000 7,00,000 70,00,000 84,00,000 98,00,000 1,12,00,000 1,26,00,000 1,40,00,000

14,50,000 1,45,00,000 3,62,500 4,35,000 5,07,500 5,80,000 6,52,500 7,25,000 72,50,000 87,00,000 1,01,50,000 1,16,00,000 1,30,50,000 1,45,00,000

15,00,000 1,50,00,000 3,75,000 4,50,000 5,25,000 6,00,000 6,75,000 7,50,000 75,00,000 90,00,000 1,05,00,000 1,20,00,000 1,35,00,000 1,50,00,000

The take home pay is ₹ 9,00,000 and annual family expenses at 35% of take home pay is
₹3,15,000. The required minimum sum assured should be 20 times of family expenses,
i.e 20 x ₹3,15,000= ₹63 lacs. Alternatively, the maximum insurance ‘sum assured’ can be
taken as 10 times of take home pay, i.e 10 x ₹9,00,000 = ₹ 90,00,000.

68
Notes
Notes
Notes
 Financial Prudence Planning Savings Account
Ÿ Open an exclusive bank account for “ financial prudence”
Ÿ Make a voluntary contribution to IFEA and claim 80G benefits. Utilise its self learning courses
and digital library facilities for skill development and career growth.
Ÿ Download “Digilocker” application from Google Playstore and keep your important
documents in digital form. Documents issued by all State Governments, 102 educational
institutions and 35 insurance companies will be considered at par with original documents as
per Information Technology Act, 2000
Ÿ Open your Demat (or second Demat) account (with trading facilities and without
maintenance charges) with Integrated to make your record maintenance easy and simple.
( refer to page 41 for more details)
Ÿ Maintain a financial discipline by transferring funds periodically to this exclusive bank
account.
(A) If you are a salaried person, transfer not less than 15% of net home pay (inc. spouse) to this
bank account .
(B)If you a professional , transfer between 10% to 12% of gross revenue to this bank account.
(C)If you are a GST paying business person/ professional transfer a minimum 2 times of GST
payment to the bank account.
Use this bank account only for voluntary contribution (80G benefits) paying term insurance
premium, mediclaim premium and for investing in ELSS scheme of your choice and NPS account.

Voluntary contributions towards “Education Corpus Fund” can be made to the following bank
accounts whenever you want. Consolidated 80G certificate with payment details will be sent at
the end of the financial year. Quoting your PAN number

For Individuals For Companies & Others

IFEA EDUCATION CORPUS FUND
Name of the Bank / Branch
City Union Bank / Mahalaskhmi Street/ T.Nagar
IFSC code:CIUB0000001
A/c No.: 510909010170415
IFEF EDUCATION CORPUS FUND
Name of the Bank / Branch
City Union Bank / Habibullah Road/ T.Nagar
IFSC code:CIUB0000652
A/c No.: 510909010170228

TM R